The Inability To Accept That Growth And Sustainability Are Not Reconcilable

There seems to be a complete inability for senior policy makers to even countenance the possibility that a period of economic contraction may be required to reduce greenhouse gas emissions at the rate required to forestall dangerous climate change. This inability was on display in an interview given by Christiana Figueres, the former UN Climate Chief, to Radio New Zealand[1]. She went out of her way to state that the decarbonization of the global economy was not inconsistent with continued economic growth. The desperation to not question the growth paradigm, and the many misleading tactics used to keep questions of growth at bay, were fully on display in the Figueres interview and the recent paper she published with others[2]:

  • Claim the recent three-year period of flat carbon dioxide emissions as proof that the delinking of emissions and growth is possible on the scale required. The fact that this was heavily dependent on short-term factors, and does not consider other greenhouse gases, is quickly swept under the table.
    • Coal to natural gas switching in the United States (with under-reporting of the related methane emissions)
    • Anti-pollution measures in China
    • One-off jumps in renewables due to expiring incentive programs in the U.S. and China
    • Counting CO2 emissions form the energy sector only, not overall CO2 emissions
    • Not counting other greenhouse gases such as methane and nitrous oxide
  • Ignore recent science that destroys the “growth is possible”, and that a carbon budget exists, narrative
    • The high probability of increases in natural emissions from forests, soils, permafrost etc. that will offset part of any human emission cuts
    • The probability that climate sensitivity is at least at the high end of the range used by the UN IPCC, and possibly higher than that range
    • The impact of an ice-free Arctic, as the reduction in albedo leads to energy balance of the Earth being significantly increased
    • The probability that sea level rise is much more sensitive to temperatures than previously assumed

At least Figueres and her colleagues did not rely upon the spurious assumptions of massive carbon sequestration technologies that at some time in the future will be able to suck more CO2 out of the atmosphere than the whole biosphere. This is the assumption used in the vast majority of UN IPCC scenarios. Without this assumption, and even using the “rose-coloured glasses” assumptions that Figueres and her colleagues use, the speed of the required emission reductions is startling and obviously inconsistent with a period of continued economic growth. The elephant in the room is obvious but then willfully ignored:

Over the past two decades the political force field around the growth paradigm has repeatedly been successful in repelling attacks. The politicians understand the Pandora’s Box that will open up once they cross the Rubicon into acceptance of a period of degrowth. The horrors that sit within that box include:

  • A large-scale reduction in wealth, as much of that wealth represents the current value of future growth.
    • Share prices based on assumed rates of future profit growth
    • Loans based upon the assumption that future growth will provide the income to pay off the principal and interest
  • A financial system crash as the assets on the books of banks and other financial intermediaries lose significant amounts of value
  • A need for the rich to share their wealth and income with the less rich
    • Without the additional income produced by growth, the only way for the less rich to improve their lot will be by redistribution from the wealthy through such things as progressive taxation (higher taxes on the rich) and higher wages. This will be both within countries, and between countries.
  • A reduction in pensions and a reorientation toward public provision. The whole pension industry relies on future growth in asset prices to provide the majority of the funds required to pay future pensions.
    • If those asset prices fall, and stay at that lower level, current and future pension payments will have to be slashed. Given the already huge under-funding of many pension plans, and highly optimistic assumptions of the future growth in asset prices, the scale of these cuts could be devastating to the vast numbers of individual beneficiaries involved.
    • The backlash against the financial industry, and corporations and governments that willfully underfunded those plans, could threaten major social change. In addition, the impact on personal consumption may be very significant; both from reduced pension payments, and from others saving more of their income as they realize that the pension income that they assumed will not be there

Any move to a period of degrowth would require massive government intervention to reorient the economy, and to provide the support necessary for the welfare of the general population. This would represent a fundamental reversal of the neo-liberal revolution of the past few decades. One of the paper’s statements is very telling, “The financial sector has rethought how it deploys capital and is mobilizing at least $1 trillion a year for climate action. Most will come from the private sector”, showing a fundamental assumption of neo-liberalism. No acceptance that the government sector could directly fund the required changes, without the need to wait for the mythical “market” to make up its mind.

This is the precipice that policy makers see every time they allow themselves to consider the possibility of degrowth, and why the soft-denial of eco-modernism reigns. The political, economic and social risks are just too overwhelming, and the power of the currently wealthy too great, to allow such a possibility to be even contemplated.

Until the actuality of climate change renders this uneasy denial untenable, we will continue along the current path with greater and greater efforts made to keep the inconvenient facts at bay.

The progress of the next UN IPCC report, to be published in 2022, will be informative. As more recent and bleaker science is integrated, and the lack of real progress in emission reductions incorporated, how will the growth narrative be supported? Will there be even greater reliance on a future requiring massive implementations of highly speculative technologies? The intellectual gymnastics required to be able to continue to ignore the elephant in the room will be quite phenomenal.

It may be a single event, or a series of events that progressively destroy the underpinnings of that denial, but at some point the soft-denial narrative will be destroyed. The scale of the required carbon emission cuts, together with the impacts of climate change, could by then very well be devastating to the economy and any hope of social stability.

Any rational government should at least be contemplating the possibility of such a “climate change paradigm shift” moment, and plan for the possibility of extremely rapid economic and social turbulence as a result. Having at least thought out in advance the impacts of such a paradigm shift will place any nation at a great advantage to those that have not had such foresight.

References 

[1] Radio New Zealand (2017), 2020: The Climate Turning Point, Radio New Zealand. Accessible at http://www.radionz.co.nz/national/programmes/ninetonoon/audio/201850245/2020-the-climate-turning-point

[2] Christiana Figueres et. al. (2017), Three years to safeguard our climate, Nature. Accessible at https://www.nature.com/news/three-years-to-safeguard-our-climate-1.22201

 

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One Response to The Inability To Accept That Growth And Sustainability Are Not Reconcilable

  1. Joe says:

    Great post! The nearly unending litany of problems associated with degrowth has always led me to believe that while controlled degrowth is so politically difficult that it may be impossible to summon the political will to attempt it, it may be also be impossible to actually manage even if the will to do so appeared.

    The global market economy emerges out of the individual actions of billions of people. While there are certainly influences from governmental entities on the operation of the market, no one is really in control of it. I believe the market is too complex to downsize much without risking a disorganized and total collapse of the market, especially in an environment of increasing climate change and resource depletion.

    The prudent attitude for individuals is to assume that the market will collapse and make preparations accordingly. Since all market activity is mediated by money, the guiding principle of individual preparation should be arranging one's affairs so that money is not needed for survival.

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